YPF posted first-quarter profit of 192 million pesos ($12.47 million), down 78 percent from 855 million pesos a year earlier, the company announced on Tuesday. It said total petroleum production for the quarter fell 1.5 percent from a year earlier to 573,500 barrels per day.

“Clearly 2017 is not going to be a strong year in terms of hydrocarbons production,” Gonzalez told investors on the call.

“At this point we are targeting a 3 percent decline in our hydrocarbons production for this year,” he added.

The company is seeking partners to develop some of the world’s largest shale reserves in the southern Patagonia area of the country. The negative production estimate was due to bad flooding in Chubut province and labor disruptions earlier this year as the government was negotiating a new pact with unions.

“We are envisioning (the 3 percent production decline), with some of the conflicts that we went through with the unions, that had to do with structural changes, which I think are a great thing for the long term, and also with negative weather that affected Chubut,” Gonzalez said.

Argentina sealed a deal this year with unions and oil companies including Chevron Corp and Royal Dutch Shell Plc to guarantee investments in exchange for greater labor flexibility and wellhead price subsidies.